Thu, 29 Mar 2018 | ADMINISTRATION
The firm that owns several discount alcohol shops – including Bargain Booze and Wine Rack – has announced that it will file for administration in the next two weeks, after dwindling revenues have put it in a precarious position.
Conviviality, which also supplies alcohol to more than 25,000 restaurants, hotels and bars, had already issued profit warnings in recent weeks and revealed that it had an outstanding £30 million tax bill due to HMRC by the end of the month.
Not long later, the company slashed its earnings forecast for the year from £70 million to £55 million.
These troubles also led to the resignation of chief executive Diana Hunter, at the head of the firm since 2013 when Conviviality listed on the London Stock Exchange.
The firm since said it will seek to raise £125 million from a placing of new shares, but announced this week that efforts to raise the extra cash were unsuccessful despite widespread support from the industry. Companies such as brewing giant AB InBev encouraged its own shareholders to back the fundraising, underlining the firm’s importance as a distribution channel.
Conviviality supplies drinks to more than 700 off licenses around the country, alongside 23,000 pubs and restaurants, employing more than 2,600 people to do so. All employees’ jobs are thought to be at risk.
Reports from inside the industry suggest that Conviviality will announce that PricewaterhouseCoopers has been appointed as administrator some time this week.
The alcohol supplier joins a long list of British retail firms going into administration, after the collapse earlier this year of Toys R Us UK and Maplin.
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